Eight-year high for uninsured mortgages

There’s been a rise in uninsured mortgages so far in 2018 according to data from OSFI.

The share of loans that don’t need insurance soared by almost a fifth in January, to 53% of the $1.13 trillion mortgages from Canada’s federally regulated banks.

It takes the share of uninsured mortgages to an 8-year high. The market has been increasing over the last few years as the government has moved to curb taxpayers’ exposure to the housing market.

New mortgage rules came into effect at the start of 2018 but the market was already being impacted by previous policy decisions including rising interest rates.

Ratings agency DBRS said Monday that: “The slowdown in mortgage growth has been evident since the middle of last year, reflecting the impact of prior policy measures, as well as three interest rate hikes by the Bank of Canada.”

The growth of the banks’ mortgage business was 5.7% in January. The most recent high was in May 2017 with a 6.6% rise.

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